Cutting expenses on rent and equipment
CASE 1. PREVIOUSLY USED STUFF
Many amusement parks and trampoline centers, children’s rooms and rope parks are closing and selling out their equipment. This is certainly sad, but this opens for opportunities for those who remained to buy previously used things. Companies can improve their assortment of attractions at an available price. For example, we bought a couple of cars for our racing track and parts for our bowling.
CASE 2. SHARING PROFIT WITH SUPPLIERS
If you don’t have enough finances, negotiate with suppliers and producers on joint use of equipment and payment respite. Many producers readily agree to the joint use option; they just install their equipment and get a share of profit. But this case doesn’t work for us, as our Guests get all the attractions buying just one ticket. But in centers where every piece is paid for separately, this is normal.
CASE 3. NEGOTIATING TERMS OF RENT
During the lockdown, rent had been devastating for many businesses. Try negotiating with owners on switching to share of your income instead of fixated sum.
In entertainment, 10–17% of net income is considered an optimal share, depending on several factors like size of area. In case of force-majeure, i.e. lack of profit, you just don’t pay. But if you earn enough, the owner can gain more than they would have if they had agreed to fixated rent.
Win-win: the owner adjusts terms basing on the current season and probability of closure, while the renter minimizes their risks. Usually owners tend to indulge renters on condition that they will receive «no less than X rubles per month».
Full list of related materials:
- 6 cases on wage fund reduction
- Sharing profit among employees
- Cutting expenses on food & beverages
- Total reduction. Series of cases on cutting expenses
- Changing work schedule
- Win-win. Saving money while improving quality
- Reducing costs for maintenance and administrative expenses
- Ways to increase revenue